The State Government announces cancelling two CSG exploration licences in the Northern Rivers

The State Government has announced it will buy back two Petroleum Exploration Licences in the Clarence region, knowing how unpopular coal seam gas mining is in northern New South Wales.

Resources and Energy Minister, Anthony Roberts, visited Grafton today to announce the buy back of two licences held by Clarence Moreton Resources, a subsidiary of East Coast Power.

The Minister says Labor's plan to ban the industry in the region will cost millions in compensation to mining companies.

Mr Roberts says leader, Luke Foley, needs to get some legal advice on the matter.

"Mr Foley needs to realise that you cannot just go to the Supreme Court and say to a Supreme Court Judge that he wants to cancel the mining licences because he wants to win an election," said Mr Roberts.

"If Labor went ahead with the plan to ban the industry in northern NSW it would cost the taxpayer hundreds of millions of dollars in compensation claims," he said.

Gasfield Free Northern Rivers says the New South Wales Government is only going after the small operators but still supports the bigger mining companies.

Mr Gaillard says approval has also been given to the largest licence area in the region, Igas's PEL 445, which covers Lismore, Nimbin and Kyogle and parts of the water supply area of major towns across the region, including Ballina and Byron Bay.

He says local communities are not stupid and will not be deceived by the latest election gimmick.